LexisNexis® Legal News Podcast - Victory For Health Care Reform Is Appealed by Jerry Falwell's Liberty University To Supreme Court

Liberty University petitions the Supreme Court over dismissal of a health care reform case, and defendants in a Propofol infection case in Nevada are ordered to pay $162.5 million in punitive damages. Hear these and other stories from LexisNexis® Mealey's Publications. Copyright © 2011 LexisNexis, a division of Reed Elsevier Inc. For the latest litigation news headlines, visit www.lexisnexis.com/mealeys or www.lexisnexis.com/communities.

A Christian school on Oct. 10 filed a petition for certiorari with the U.S. Supreme Court, seeking review of a divided lower court decision that held that the Anti-Injunction Act (AIA) stripped the court of jurisdiction to hear a challenge to the Patient Protection and Affordable Care Act (PPACA) (Liberty University, et al. v. Timothy Geithner, et al., W.D. Va.).

On Nov. 30, the U.S. District Court for the Western District of Virginia, Liberty Univ., Inc. v. Geithner, 753 F. Supp. 2d 611 (W.D. Va. 2010), dismissed a challenge to the PPACA brought by Liberty University Inc., Martha A. Neal, Michele G. Wadell, Dr. David Stein, Pausanias Alexander, Mary T. Bendorf, Joanne V. Merrill, Kathy Byron and Jeff Helgeson against U.S. Treasury Secretary Timothy Geithner, Health and Human Services Secretary Kathleen Sebelius, Secretary of Labor Hilda L. Solis and U.S. Attorney General Eric Holder, finding that Congress acted within its constitutionally delegated powers under the commerce clause when it passed the employer and individual mandates contained in the PPACA.

In a divided opinion, Liberty Univ., Inc. v. Geithner, 2011 U.S. App. LEXIS 18618 (4th Cir. Va. Sept. 8, 2011), the majority of a Fourth Circuit U.S. Court of Appeals panel on Sept. 8 held that the AIA strips the court of jurisdiction to hear Liberty University's challenge to the PPACA and remanded the case with instructions to dismiss the case for lack of jurisdiction.  The dissenting judge said he would affirm the lower court's decision that Congress acted within its powers in passing the challenged provisions of the act.

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McGuireWoods on the Supreme Court's Federal Health Care Reform Law Decision

   

By Stephanie A. Kennan, Brian Looser, Vincent A. Dongarra and R. Brent Rawlings

Intro:

On June 28, 2012, the Supreme Court of the United States issued its opinion in the case of National Federation of Independent Business et al. v. Sebelius, Secretary of Health and Human Services, et al. [enhanced version available to lexis.com subscribers], ruling on the constitutional challenges to the federal health reform law, the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (the ACA).  The Court upheld the controversial "individual mandate" as constitutional under Congress's tax power and permitted the ACA's Medicaid expansion to continue, but only on a voluntary basis by the states.

The Anti-Injunction Act Does Not Bar a Decision

Question before the Court:  Does the Supreme Court have the authority to consider the constitutionality of the individual mandate given the penalties for non-compliance do not take effect and would not have been paid until 2015?   The Anti-Injunction Act (AIA) provides that the taxpayer must pay the tax before being able to challenge it. So is the penalty a tax?   

Decision:  The Court held that the AIA did not bar a decision because-for purposes of the AIA only-the penalty for failing to obtain health insurance under the individual mandate is not a tax.  Chief Justice Roberts, writing the only portion of the opinion in which all the justices joined, disagreed stating that the AIA and ACA "are creatures of Congress's own creation. How they relate to each other is up to Congress, and the best evidence of Congress's intent is the statutory text." Opinion of Roberts, C.J. at 13. In other words, when analyzing the individual mandate under the rules of the congressionally-created AIA, it is more important that Congress referred to it as a "penalty" instead of a "tax," even though it effectively functions as a tax.   

Policy Perspective of Decision: The Court's ruling on this question does not cause a change in policy or implementation. 

The Individual Mandate is Constitutional as a Tax

Question before the Court:   Can the federal government require Americans to obtain health insurance by January 1, 2014 or pay a penalty?  The Court reviewed Congress's power to institute the individual mandate under the Commerce Clause, Necessary and Proper Clause, and the Taxing and Spending Clause. 

Decision:  The Court upheld the individual mandate, not under the Commerce Clause or the Necessary and Proper Clause, but as a valid exercise of Congress's enumerated power to collect taxes under the Taxing and Spending Clause.   

The Court held that the individual mandate could not be sustained as a valid exercise of Congress's authority under the Commerce Clause because a necessary precursor of that authority is some existing activity that affects interstate commerce.  The Court reasoned that the individual mandate does not regulate an existing activity; rather, it compels individuals to become involved in an activity and that "[C]onstruing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority."  Opinion of Roberts, C.J. at 13.   

The Court also dismissed arguments that the individual mandate could be sustained as a valid exercise of the Necessary and Proper Clause.  The Court reasoned that, while the individual mandate may be "necessary" to the guaranteed-issue and community-rating provisions, it is not "proper" because the necessity is based upon the guaranteed-issue and community rating provisions themselves.

Click here to read more of McGuireWoods on the Supreme Court's Federal Health Care Reform Law Decision.

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Supreme Court Nixes State Suits Against Generics

By David Pittman, Washington Correspondent, MedPage Today

WASHINGTON -- Makers of generic drugs cannot be sued under state law for side effects of their products, the Supreme Court ruled Monday, angering patients' rights advocates.

In a 5-4 decision, the justices overturned a multimillion dollar award to a woman who suffered damages from a generic medication, noting that federal law prohibits drugmakers from making changes in their warning labels without the approval of the FDA.

The case, Mutual Pharmaceutical v. Bartlett, involves a woman who, in 2004, was prescribed Clinoril, the brand name for the nonsteroidal anti-inflammatory drug sulindac. The pharmacist dispensed the generic version manufactured by Mutual. The woman developed an acute case of epidermal necrolysis and sued Mutual seeking damages for the severe disfigurement she developed. A jury awarded her $21 million, an award that was later upheld by a circuit court.

But the Supreme Court said the federal Food, Drug, and Cosmetic Act allows only the FDA to make labeling changes and supersedes state law -- including the one in New Hampshire where this case originated -- that tries to force drugmakers to make labeling or design changes when safety issues arise.

"Here, it is impossible for Mutual to comply with both its federal-law duty not to alter sulindac's label or composition and its state-law duty to either strengthen the warnings on sulindac's label or change sulindac's design," Justice Samuel Alito wrote for the majority.

The High Court said Monday the First Circuit Court of Appeals' ruling was flawed. The lower court said Mutual could have stopped selling sulindac if the drugmaker knew it was unsafe.

It was not until 2005 that the FDA ordered new labeling on all NSAIDs to include a warning for the condition.

The Generic Pharmaceutical Association, the Washington-based trade group of the generic-drug industry, hailed the decision, saying it reaffirms the FDA's authority to oversee the safety of drugs.

"When it comes to decisions on safety and approval of prescription medicine, the FDA is best equipped to make judgments that affect patients," Chief Executive Ralph Neas said in a statement. "The experts at FDA alone have the scientific knowledge, regulatory experience, and complete data to make these decisions."

Monday's decision frequently cited the 2011 case Pliva v. Mensing, which found that generic drugmakers were preempted in state failure-to-warn cases challenging the generics' safety because federal law prohibited changes to generic drug labels without changes to the branded drug's labeling.

"Generic-drug manufacturers' inability under current regulations to update the labeling of their products poses a threat to the safety of prescription drugs, creating unnecessary risks to patients," Michael Carome, MD, director of Public Citizen's Health Research Group, said in a statement.

The consumer advocacy group Public Citizen released a report Monday noting that many safety issues aren't recognized drugs until years after a drug receives FDA approval and are available in a generic form. According to the report, at least 53 drugs approved by the FDA more than 10 years ago have required new black box warnings in the past 5 years.

Public Citizen called on lawmakers and regulators to update post-marketing regulations to bring generics more in line with the safety requirements of their branded counterparts.

David Pittman

David Pittman is MedPage Today’s Washington Correspondent, following the intersection of policy and healthcare. He covers Congress, FDA, and other health agencies in Washington, as well as major healthcare events. David holds bachelors’ degrees in journalism and chemistry from the University of Georgia and previously worked at the Amarillo Globe-News in Texas, Chemical & Engineering News and most recently FDAnews.

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